Fuel tax, fuel shortages and unethical companies...

There has been so much spin on this subject in the last few days, it's time to record the facts.

Firstly, the current shortages in the UK are tax related, not supply related per se. Follow the logic. There is an impending fuel tax protest, people are concerned over the possibility of blockade by hauliers, or rationing by the government. So they buy a lot of petrol, which causes shortages. So, it's tax related, not supply related. Sure, you can say "oil prices are up, due to increased demand, and lack of refining capability" and that's true. But this immediate situation is tax related in the UK.

Secondly, Gordon Brown and others bleating to OPEC to raise production, will do no good. It's the international political equivalent of Kevin the teenager "It's so unfair !.........produce more oil" Pointless, and the smarter people in the adminstration know it.

Third, you may or may not hate Shell or other oil companies because you see them as "global wreckers" or whatever, but this immediate situation is not their doing. They are merely acting as a market economy compells them to.

So, to the issue of tax.

1. The government raise about 47p per litre in fuel tax. The fuel escalator was introduced years ago by (next facts from memory) Norman Lamont who had it at 3%. His successor, Ken Clarke put it up to 5% and the current chancellor increased the escalator to 6%. The thing with escalator's is that eventually you have to get off. Gordon has us on a stairway to heaven.

2. As the price of oil goes up, so does government revenue from North sea oil. In addition, higher oil prices mean higher profits for oil companies, and therefore, increased corporation tax receipts. So Brown already has a double whammy of increased revenue.

He could therefore cut the petrol tax, and not have that impact on his revenue. So all the muppets who say "What spending should the government cut then?" ('cos you know, the government is totally efficient and there's not a penny wasted in their multi-billion pound empire) are missing the point. Cuts in government spending are long overdue, but you don't need to cut spending at all. A fuel tax cut would be revenue neutral, due to the other two revenue increases above.

So, Gordon has in it his power, at the stroke of a pen, to solve this crisis. But he doesn't. He just moans about OPEC, talks about rationing (which incidentally would seriously damage the economy and really hurt tax revenue) and dithers. France, Belgium and Poland amongst others have in recent days, cut fuel duty. But Gordon still dithers. He expects you and I to live on less (due to his tax increases), but he won't give up the revenue. He just dithers.

So, he can solve a crisis, by showing real leadership, and cutting fuel duty, which would be revenue neutral anyway. Instead he lets things drift, risks real damage to the economy, and does nothing. This is not leadership, and if he can't show leadership in a crisis, then it would seem he is NOT the man to be the next Prime minister.

So Gordon, it's up to you mate. Leadership or dithering? the availability of petrol in the coming days will answer that question, and judge your suitability for high office.